DOTr aborts planned grab of land transport sector

The June 19 affair at Camp Aguinaldo hosted by the Department of Transportation (DOTr) got a low-key media treatment. And the print and broadcast stories had a predictable peg – the DOTr’s grand plan to modernize and upgrade the quality of passenger jeepneys. Even the minor stories before the event proper focused on that angle, the jeepney modernization plan.

Jeepneys, and their survival, occupy a special place in the country’s land transport policies and no DOTr administration would formulate a land transport policy without the jeepney component. With that in mind, the jeepney peg of the media stories was entirely predictable.

The jeepney peg was accurate — but only up to a certain point. If you read the entire department order (DO) from the DOTr, you will be struck by the scale and the ambition of what the DOTr wants to do. What the DOTr intends to do, borrowing from Mr. Trump, is yyyuge. The DOTr directive is not limited to jeepney modernization — it covers almost every nook and cranny of the land transport system. Every single facet, every single element. Every sub-sector was covered.

But then again, there is a big story and a bigger one after that. Having a rudimentary knowledge of the transport sector, the big story and the bigger story unravelled easily after reading the order from the DOTr. But one has to read it well and digest its meaning. A context is necessary to appreciate the grand scope of the DO.

First, the big story.

The new department order is actually a 21st century upgrade of the century-old Public Service Law. It overhauls the franchise application system. It covers all the PUV sectors: buses, mini-buses, AUVs and taxi franchises and, of course, the jeepneys. And the new entry is the BRT or the Bus Rapid Transit, which has yet to be a part of the current Public Service Law.

What is new about that, you may ask. Here is the answer.

The DOTr and the Land Transport Franchising and Regulatory Board (LTFRB) will tap the LGUs in the determination of what routes to open up to applicants. Franchise openings used to be based on the RMC studies (route measured capacity) of the DOTr/LTFRB. Now, data has to come from the LGUs, which shall be trained by the DOTr and the LTFRB on the intricacies on local transport planning. The DOTr feels that the LGUs have a deeper understanding of transport patterns, passenger traffic, the determination of growth areas and the like. So, they have to feed the DOTr/LTFRB on the relevant data.

The department order even created a special area called MUCEP, which covers the whole of Metro Manila and four provinces: Bulacan, Rizal, Laguna and Cavite. Indeed, this is where Luzon traffic is heaviest.

Gone is the century-old practice of letting the RMC studies guide every new franchise openings in the transport sector. It is a new era. It is a new ballgame. The safe and technocratic tone of the DO just understate the significance- and scope – of what it intends to overhaul.

Now, the big, big story, referred to in this piece’s headline, the aborted takeover of the land transport sector.

The plan of the previous government was for the handover of the bus sub-sector, easily the biggest in the land transport sector, to a friendly tycoon. Under the guise of efficiency, the LP wanted to eliminate all the independent players in the bus sub-sector in favor of a business crony. Not just the Metro Manila bus operations. The bigger pie, the provincial operations, was to be the crown jewel of that transport grab. The public reasons were consolidation and efficiency. But the real reason was a scam – to favor a crony and eliminate the plucky and independent bus operators. Some of these players have been there for an entire generation.

The early drafts of the DO presented to Secretary Art Tugade, in fact, proposed a minimum capitalization of P500 million for every bus operator, even if the cost of fulfilling the demands of the new order do not really requite that much capital. A new line opening may require at the maximum only 20 franchises and that is only worth P140 million max, with each modern bus at P7 million each – and all paid for in cash, which is not the industry practice.

Bus industry people saw the P500 million required capitalization as a subtle ploy to allow the entry of the tycoons via the backdoor. It was, they said, in the old draft of the previous DOTC ‘s supposed “ land transport rationalization plan.”

In the final version of the DO signed on June 19 at Camp Aguinaldo, the provision on the P500 million capitalization was gone. Expunged by the new DOTr leadership. The new DOTr leadership apparently saw through that scam, which required mini-bus operators to have a minimum capitalization of P120 million. To operate jeepneys, the minimum capitalization required was P7 million.

P120 million to operate mini-buses and P7 million to operate jeepneys? What? Favoring the wealthy was too clear in that discarded draft.

The previous administration’s milestone achievement was using policy to skew everything to place every viable economic sector in the hands of the truly wealthy.

Now, the sense of economic parity and equity is being restored via small and grand gestures in some economic areas. And that event at Camp Aguinaldo on June 19 was a yyuge gesture for parity and equity.

Now, this question. Who was the crony of the previous dispensation who wanted to take over the Luzon component of the bus industry? Clues. He is a very wealthy man who held an important post in the previous government. He messed up with the balikbayan box policy and that bungled plan provoked anger and rage from the OFW communities across the globe. And that OFW rage played a large part in the loss of the LP candidate.